Microsoft to Palm: BMW to Volkswagen?

LAS VEGAS--The race between Palm and Microsoft's Pocket PC remains far from over, although both sides used a presidential-style debate Monday to paint the other as ill-suited for the future of handheld computing.

At the Comdex trade show here, executives from both camps met onstage to pick apart each other's operating systems for handhelds.

One executive from the Pocket PC side called Palm a good organizer that has garnered a significant share of individual users, but said the Microsoft approach will win out when big corporations start using handhelds extensively. One panelist called the Pocket PC a BMW to Palm's Volkswagen.

In one of the best jabs of the debate, Palm chief competitive officer Michael Mace proclaimed size is a significant factor.

"One you can carry in your pocket," Mace said, referring to a Palm-based handheld. "The other you can carry in your pocket, but it will pull down your pants," he added, pointing to a Compaq iPaq with an attached slide-on sleeve required for adding expansion modules.

However, the Microsoft side recovered later, noting that Mace had not shown the screen on the Palm-based Sony Clie he was showing off.

"If you saw the screen on the Clie you would probably rather use the Pocket PC, even with your pants down," said Compaq vice president Ted Clark, who heads the company's iPaq unit.

Meanwhile, Handspring vice president Joe Sipher likened handheld computing to a camping trip: In theory, you'd like to have your own bed, a refrigerator and a stereo. But when you are carrying all your gear on your back, you settle for what you really need. Handspring's products use the Palm OS.

Both camps essentially reiterated divergent views of what most handheld users want. Palm made the case for delivering simplicity and expandability. Microsoft argued that it makes sense to build in support for features such as email attachments, full Web surfing and MP3 playback.

Predictably, Palm made the case that it has more developers and programs. Microsoft executives conceded that Palm has managed to dominate the market. Microsoft is currently on it third attempt at successfully marketing its operating system for handhelds.

However, Microsoft mobile devices director Phil Holden tried to steer the debate to the future, arguing that Microsoft's experience in big business will enable it to win out in the next phase of the handheld market: the battle for corporate customers.

In the end, the hundred or so folks gathered at the Venetian Hotel for the debate were asked to decide the winner in a decidedly nontechnical way: by raising their hands. A strong margin agreed that the Microsoft side had done a better job at the debate. However, slightly more than half believed that the Palm operating system will still have the majority of the market share three years from now.